Newsletter - October 2, 2019
In a sea of climate cash, adaptation left stranded?
This past fortnight, the hopes raised by repeated impassioned calls leading up to the UN Climate Action Summit failed, by most measures, to lead to raised ambitions. But while governments have dragged their feet in the face of huge public protests, the tide seems to be turning in favour of climate action when it comes to private money. With big money falling in line with the climate agenda, is it time for governments to start thinking about priorities, and not just ambition?
And just like that, the numbers involved in climate action have moved from billions to trillions of dollars. Somewhat surprisingly, leading this private finance movement towards climate responsive development in New York, on the sidelines of the UN General Assembly, were banks. One hundred and thirty leading banks, collectively holding $47 trillion of assets – or a third of the total global banking sector, committed themselves to the newly formulated Principles for Responsible Banking to align investments with the objectives of the Paris Agreement and the Sustainable Development Goals. The list includes 24 national and regional development banks, which, for the first time, announced a quantitative target of mobilising $1 trillion by 2025, while some 1,100 institutional investors managing $11 trillion have committed to moving away from fossil fuel investments. Another 515 global institutional investors holding portfolios of assets worth more than $35 trillion have chided national governments for failing to keep step with private commitments.
While corporations around the world are still widely guilty of not reporting emissions, the climate movement among private businesses seems to have reached a tipping point with private investors and businesses increasingly siding with protestors rather than governments. According to a recent study conducted by Swiss bank UBS, over half of the family offices, which act as financial managers for the world’s ultra-high-net-worth individuals, now “consider climate change to represent the single greatest threat to the world.” Even in the US, which has gained a reputation for notoriety when it comes to climate action, the Chamber of Commerce, this past week, announced that it would be forming a climate change task force to analyse how businesses are responding to the threats posed by climate change.
So what has prompted this sudden change of heart? In reality, the change in mindset has been building for a few years now. While the bank of England underlined the “huge” threats of climate change to global financial stability back in 2015 and banks have increasingly prioritised “green loans”, the recent acceleration in climate-responsive commitments made by large banks and private businesses is likely the result of a different realisation – more accurate estimations of the escalating liabilities of inaction. Since this 2015 Economist Intelligence Unit report that put up to 30% of the world’s manageable assets at risk from climate change, portfolio level investment analyses of climate risks have been coming thick and fast- and almost all have come to chilling conclusions. The implication being that self-interest would be incentive enough for businesses to invest in sustainability.
Although investors and businesses becoming more cognisant of the unfolding crisis is indeed good news, it should be noted that more than half of climate finance is already privately mobilised. What’s more, the scope is overwhelmingly domestic. Read self-interest. And for the same reason, it would be foolhardy to believe that private finance alone would be able to tackle climate change since most of such funds go towards primarily mitigation activities such as improving energy efficiency and increasing renewable energy capacities.
The bias towards mitigation is clear even when it comes to public climate finance. While annual private climate finance is estimated to have been at around $500 billion in 2017, public finance has struggled to inch its way towards the $100 billion a year commitment made by developed nations, of which less than a fifth goes towards climate adaptation. Of the total climate finance flow, less than 0.05% makes it towards adaptation interventions despite mounting tolls of climate impacts.For India, the lop-sidedness of climate action is readily visible. The bulk of India’s progress has come through industry-led mitigation, while adaptation funding has fallen severely short.
A recent report by the Global Commission on Adaptation found that $1.8 trillion investment in adaptation activities would yield net co-benefits worth more than $7 trillion. A pretty good investment, except much of the value will be added through benefits to the public such as ecological services and improved resilience – things for which we look to our governments. With increasingly ready businesses, the time is right for governments to start focusing on adaptation. The clues couldn’t be clearer, no matter the levels of private climate finance, unless governments start spending on adaptation, catastrophic losses will be unavoidable. And who’s to say what the anger will look like then.
Cut emissions now or watch cities vanish underwater, marine life collapse: IPCC report
The Intergovernmental Panel on Climate Change (IPCC) report on cryosphere and oceans released this fortnight confirmed all the worst fears scientists had about our warming oceans, glaciers and ice caps. Yes, the waters are rising, the ice is melting, but with radical action, the catastrophe Earth is hurtling towards can be averted, the study stated. That process has definitely started. Case in point: Reports this fortnight that part of a glacier on Europe’s highest mountain, Mont Blanc, is at risk of collapse. Authorities have closed roads and evacuated Alpine hamlets.
According to the IPCC report, the need of the hour is deep, immediate carbon emission cuts. Some of the alarming predictions made by the study, if emissions are not drastically reduced, include the sea levels could rise by one metre (3.3 feet) by 2100 – 10 times the rate in the 20th century. The study also predicted thawing permafrost in places like Alaska and Siberia could release vast quantities of greenhouse gases, potentially unleashing feedback loops driving faster warming. Closer home, in the Himalayas, the study stated glaciers feeding ten rivers, including the Ganges and Yangtze, could shrink dramatically if emissions do not fall, hitting water supplies across a swathe of Asia.
Floods in Patna, UP kill 148 as India records highest rainfall in past 25 years
India recorded its highest rainfall in the past 25 years this monsoon, the India Meteorological Department (IMD) said with 1,600 deaths reported across the country so far. The country’s northern states of Patna and Uttar Pradesh were inundated with heavy rainfall and subsequent flooding this fortnight, killing at least 148 people. In Chhattisgarh, incessant rain forced a swollen river to change course and enter a coal mine, damaging it completely.
After a slow start, India is set to end the monsoon season ‘above normal’ with 7% more rainfall than usual this year. Monsoon in the country usually begins on June 1 and ends on September 30. The retreat usually begins in Rajasthan from September 1 onwards, but this time it has continued to rain in this region.
While a longer monsoon season will help restock reservoirs and replenish groundwater, it could also damage summer-grown crops such as cotton, soybean and pulses that are close to harvest. The last time India saw above average rainfall was in 2013.
European satellite to enable hi-res view of greenhouse effect
Europe is all set to launch a satellite that will enable scientists to obtain a high-resolution view of Earth’s greenhouse effect. The satellite will carry a spectrometer to sense the far-infrared radiation coming up off the Earth. “Satellite missions up until now have mostly measured wavelengths in the mid-infrared – that’s shorter than 15 microns,” Dr Helen Brindley from Imperial College London and the UK National Centre for Earth Observation told the BBC. “We’re now looking to measure longer than 15 microns which has never been done before from space.”
This enhanced monitoring capacity will give scientists an opportunity to find missing key features in their climate models.
2015-19 warmest five-year period on record, says UN report
A UN report revealed that the average global temperature for the 2015-2019 period is on track to be the warmest on record. The report also concluded that the average global temperature is already 1.1°C above pre-industrial times and 0.2°C warmer than 2011-2015 period. This is alarming because the Paris Agreement aims to limit warming to 1.5°C because, according to scientists, any temperature above that would lead to catastrophic weather events.
The report, United in Science, which took into account the latest climate science by global research organisations such as the World Meteorological Organisation (WMO), also found the global mean sea level rise increased from 3.04 millimetres per year in 1997-2006 to 4 mm/year in 2007–2016.
Climate change could cause drought in 60% of global wheat-growing areas: Study
The staple in every diet across the world – wheat – could be in jeopardy because of climate change. According to a new study, if climate inaction continues, up to 60% of current wheat-growing areas worldwide could see simultaneous, severe and prolonged droughts by the end of the century. What’s worse, the researchers say the risk of drought in wheat production areas is four times what it is today.
Even if warming is limited to 2°C, up to 30% of wheat production areas across the world could suffer through a simultaneous drought. This would not only affect global production, but also push up food prices, the researchers said.
North America’s bird population declines by 3 billion in 50 years: Study
Birds in the US and Canada are ‘in a crisis’ according to a new study, which stated North America has lost more than a quarter (29%) or 3 billion of its bird population since 1970. There were being lost across every type of habitat – from grassland to coasts and deserts. While the study did not point to the exact reason for the drastic decline, it did conclude that there were multiple factors, a major one being the loss of habitat due to human activity.
‘Cooling’ aerosol particles failing to keep up with global warming, says study
Aerosol particles, which are primarily known to cool down the warming effect caused by greenhouse gases, are growing tinier in size and as a result losing their ‘cooling effect’, according to a new study. A major natural source for these aerosol particles are coniferous forests. But industrialisation, mainly agricultural and fossil fuel emissions, are making the aerosol particles even tinier, making it impossible for them to reflect sunlight and cool the warming effect of greenhouse emissions, according to the study.
UN Climate Action Summit falls short on expectations
All expectations of announcement of concrete action at the UN Climate Action Summit came crashing down this fortnight. The target UN chief António Guterres wants the world to achieve is net zero emissions by 2050. But most major economies failed to enhance their ambition. Guterres, however, chose to focus on the positives and spoke about how a coalition of 77 smaller countries said they were committed to achieve net zero emissions by 2050 and 70 countries expressed their intention to set a more ambitious climate plan next year in his closing remarks.
The failure of countries to make concrete announcements is even more disheartening because a report released just before the summit found commitments to cut greenhouse gas emissions must be at least tripled and increased by up to fivefold in order to meet the goals of the 2015 Paris climate agreement. A tall ask given the hesitation shown by larger economies.
There was one person, though, who grabbed international headlines at the otherwise lacklustre summit – Swedish teen activist Greta Thunberg. After denouncing world leaders for failing to tackle climate change in a speech at the start of a climate summit, Thunberg was named as one of four winners of the 2019 Right Livelihood Award, known as Sweden’s alternative Nobel Prize. She also inspired four million young people worldwide to flood city streets to demand political leaders take urgent steps to stop climate change.
Sixteen kids, including Thunberg and 11-year-old Ridhima Pandey from Uttarakhand, India, filed a legal complaint to the United Nations, which outlines how their human rights are being violated by the failure of nations, particularly five nations – Argentina, Brazil, France, Germany and Turkey – to seriously address the climate crisis.
Under the UN Convention on the Rights of the Child, countries have specific obligations to provide for the health and well-being of children, which aren’t being met as the climate crisis intensifies, according to their petition.
India’s climate adaptation fund woefully inadequate, say experts
India maybe leading the renewable energy race, but it is seriously falling behind in its efforts to adapt to climate change. This year’s Union budget allocated ₹ 100 crore to the country’s National Adaptation Fund for 2019-2020, which is only a fraction of the total budget of over ₹ 2,900 crore allotted to the Union environment ministry – 16% lower than that in 2017-18. According to experts, the adaptation projects that are currently ongoing in states such as Punjab and Kerala are also very small in scope. This is a cause for concern because India is facing floods and droughts with increasing frequency, making climate adaptation the need of the hour.
A report by the United Nations Conference on Trade and Development (UNCTAD) emphasised the need for public funding to achieve the UN-mandated sustainable development goals (SDGs) by 2030. Why more public funding? This is because, according to the report, the world has been sinking in private debt, which, in turn, has fomented inequality since the past four decades and consequently led to environmental degradation.
Blow for airline industry as China backtracks on support for UN aviation emissions plan
At a time when the aviation sector’s increasing carbon footprint is creating quite a stir among activists, a landmark UN deal, which aims to cap emissions from international flights, has seemingly lost the support of China, which has one of the world’s fastest-growing aviation systems. China – once a critical early supporter of the UN plan called Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which was announced in 2016 – joined Russia in arguing the proposal would unfairly penalize emerging and developing countries because it raises costs.
“Given the difference among countries in development stage, historical responsibility and coping capability, the ‘one-size-fits-all’ approach for CORSIA implementation orchestrated by developed countries is a de facto reversion to the law of the jungle,” the paper said.
Shipping sector sets goal of achieving zero carbon emissions by 2030
With the maritime sector under tremendous pressure to cut down on emissions, leading ports, banks, oil and shipping companies launched an initiative that aims to have ships and marine fuels with zero carbon emissions on the high seas by 2030. The sector has been taking significant steps in recent times to ensure it reaches its target to cut its greenhouse gas emissions by 50% from 2008 levels by 2050. The initiative has been backed by some big names in the industry, including AP Moller Maersk, which owns the world’s biggest container shipping line.
Russia officially joins Paris climate agreement
In some good news, the world’s fourth-largest emitter, Russia, formally adopted the Paris Agreement this fortnight. This is a welcome sign from a country where climate policy has been largely non-existent for years. On the cards currently are two national plans for low carbon development and adaptation, which the government is reviewing.
Despite ban, and awareness campaigns, crop burning resumes in Punjab, Haryana and UP
The dreaded season of crop burning began early this year compared to last year. Farmers in the neighbouring states of Punjab, Haryana and western Uttar Pradesh are burning the residue of the summer harvest of paddy, to prepare the fields for the winter crop of wheat. This smoke annually spikes up the pollution in Delhi, the city infamous for its deadly winter air pollution. NASA satellites captured several red dots, indicating burning of crop residue, over the districts of Amritsar, Ludhiana and Patiala in Punjab, and Karnal, Kurukshetra and Ambala in Haryana and some places in western Uttar Pradesh.
Punjab pollution control board officials said the farmers sowed crops 10 days earlier than the sanctioned date of June 10, which has resulted in early harvests. Last year, Punjab had given 13,000 stubble management machines to farmers that reportedly reduced the smoke by 10%, but the Haryana awareness campaign is hardly making any difference. Delhi CM Arvind Kejriwal has decided to launch odd-even traffic scheme for two weeks in November to counter the crop burning smog. Meanwhile, the country’s apex pollution control authority EPCA issued orders to monitor pollution hotspots in Delhi to prevent industrial units burning “unauthorised fuels” such as plastic and rubber waste, furnace oil, coal and chemicals.
Except coal plants, 95% of Delhi industrial units shift to CNG: Govt study
The Delhi government said 95% of its industrial units have shifted from oil and coal to Compressed Natural Gas (CNG) over a period of just three months, reducing air pollution in the Capital. According to government think-tank Dialogue and Development Commission, of the 1,542 industrial units in Delhi that ran on either oil or coal, 1,457 shifted to CNG in one quarter. Delhi’s CM Arvind Kejriwal has controversially claimed that Delhi’s air pollution has dipped 25% in the past three years. The Delhi government also gave compensation of ₹ 50,000 to small industries and ₹ 1 lakh to big units for converting from polluted chemical-powered units to CNG. Kejriwal is expected to share his experience of bringing Delhi’s pollution levels down at the C40 World Mayors Summit to be hosted at Copenhagen, Denmark, between October 9 and 12.
Rs. 69,000 crore corpus being planned to tackle urban air pollution
The 15th finance commission is reportedly working on a plan to free up ₹ 69,000 crore to incentivise local urban bodies and link central funding to performance of air quality improvement measures. The corpus is being planned in consultation with the environment ministry which has proposed “performance grants” linked to action limiting PM10 pollution. The ministry has also proposed reserving 60% of the grants for states in the Indo-Gangetic plains considering inherent disadvantages of their geographic location when it comes to air quality.
Haryana govt dragged to court as tonnes of fly ash choke residents
Miles away from the national capital of Delhi, a Haryana government coal plant has become a massive source of fly ash pollution for the residents of Faridabad. India’s green court has ordered the Haryana pollution control board and the Faridabad District Magistrate to submit a report about “Several lakh tonnes of fly ash dumped …causing severe air pollution in six colonies and villages”. The plant was shut down in 2011, but, in 2016, the government allowed fly ash to be transported to other places from the spot.
Smoke from forest fires turn Indonesia into stifling blood red planet
In Indonesia’s Sumatra Island, smoke from forest fires turned the sky blood red in sunlight. Residents found it difficult to breathe under the thick smog from forest fires burning for months now. The fires are a result of slash-and-burn farm fires as an El Nino weather pattern exacerbates the annual dry season and helps create a haze across the region, Reuters reported. Scientists attribute red skies to the presence of aerosols (solid or liquid particles suspended in air) that can originate from forest fires, dust kicked up by sandstorms, sea spray or volcanic eruptions, among other things. Indonesia’s meteorology agency said there had been very thick smoke in the Muaro Jambi area of Sumatra last weekend with satellite analysis revealing many hot spots.
The Indonesian fires have impacted the air of neighbouring Kuala Lumpur that was ranked among the world’s most polluted cities, as wind brought ash and smoke from illegal burning of forests and farmland. In Singapore, air quality levels deteriorated to unhealthy.
China planning stricter emission targets to tackle autumn-winter pollution
China’s environment ministry has announced that it is planning to introduce new stricter emissions standards for cities, targeting those that were heavily affected by PM pollution last year. However, cities that met last year’s targets will be exempt from the stricter norms, according to the ministry spokesperson. According to a draft for the Beijing-Tianjin-Hebei zone, the capital is expected to achieve zero emission growth while the other 27 cities would be required to cut PM 2.5 emissions by 1-11%. The new targets are being planned for the autumn-winter heating seasons which sees heavy pollution and smog envelope several cities in the country.
Governments and philanthropists form coalitions to reduce outdoor air pollution
The New York climate action summit witnessed key declarations to curb air pollution. WHO launched the Clean Air Coalition led by Spain and Peru, while a group of big philanthropic organizations launched a new Clean Air Fund with $50 million in initial funding and a goal of raising a total of $100 million. The funders: IKEA Foundation, Children’s Investment Fund Foundation, Bernard van Leer Foundation, Oak Foundation, Guy’s and St Thomas’ Charity and the FIA Foundation, aim to spur investment to reduce outdoor air pollution, which also contributes to climate change. The UN body the Climate and Clean Air Coalition (CCAC) also agreed to “significantly reduce” short-lived climate pollutants by 2030.
The CCAC’s target is to achieve beyond the recommendations made by the Intergovernmental Panel on Climate Change (IPCC) in its special report Global Warming of 1.5˚ C. According to the report, there need to be considerable cuts in emissions of black carbon (35% by 2030), methane (37% by 2030) and HFCs (70% to 80% by 2050) if we are to keep warming below 1.5˚C.
High on hydro? PM Modi vows to “double” renewables share to 450 GW by 2022
At the New York climate action summit, PM Modi vowed to double the renewables target to 450 GW. Experts say India’s earlier target of 175 GW by 2022 itself looked far from achievable, and the new one cannot materialise without factoring in large hydro in the renewable energy mix. But with industry ignoring new solar and wind project auctions over policy issues, including the mandatory feature of using domestic solar equipment, will the high-profile target be met?
Experts say the government has found the answer in large hydro projects. Recently, the government reclassified hydro projects of over 25GW capacity as renewables, which shot up the share of hydro seven times its previous share in the renewables energy mix. Earlier, wind energy stood at 50% of all renewable energy capacity, which has now fallen to only 29.3%. Solar energy’s share will fall from 34.68% to 21.61%. The hydro sector, however, will see its share jump from just over 6% to over 41%. With the addition of large hydro to the clean energy segment, India is poised to have 225 GW of renewable energy by 2022.
However, critics say this doesn’t involve creating new resources of renewable power, but just reclassifying the existing resources. They also point out that hydro projects bring with them contentious issues of resettlement of the affected population and infrastructure development, many projects have been stuck and delayed because of that.
Government is simultaneously planning to streamline the issues in the ailing solar and wind sector. The PM himself has stepped in to help ease the credit flow from banks, who are wary of lending money in the face of tariffs too low to sustain profits. The renewable energy ministry is also planning to introduce a standard bidding document and power-purchase agreement (PPA) for projects. With so much at stake, only the next few quarters will reveal how close India has inched to its new target.
Scramble to meet new 450 GW target: PMO wants easy credit for green energy firms
India’s Prime Minister Narendra Modi is leaving nothing to chance after he promised the world a fresh renewables target for India (450GW by 2020). His office has asked government think-tank NITI Aayog to assess the situation to improve financing for renewable energy projects after big government banks such as the State Bank of India (SBI) refused money to developers who have committed to sell power at less than Rs3 per unit, reported Mint.
With tariffs of solar (₹ 2.44) and wind (₹ 2.43 per unit) energy projects at a record low, banks are wary of parting with money to fund projects that can barely make profits. Niti Aayog is yet to resolve the issue of payment defaults of state distribution companies (discoms). Their payments to renewable energy companies have been pending from as long as 15 months.
Easy on energy companies, tough on buyers? New norms to meet higher renewables target
Facing a slowdown in the solar and wind energy sectors over issues of payment dues, India is planning to introduce a standard power-purchase agreement (PPA) for projects. Officials say states would face tough penalties for defaults. Payment through a letter of credit-type system is on the cards. To sort out land-acquisition issues, the ministry plans to change the project-award system, switching the “plug-and-play” model.
According to a Business Standard report, the Centre will acquire the land for wind projects, create special-purpose vehicles (SPVs) through state-owned companies such as SECI, NTPC, NHPC, PFC, and REC. The land will then be allotted to private companies bidding for projects. Experts point out that the government is following the same route it took for ultra-mega thermal power projects (UMPP). Of the 16 UMPPs planned, four were handed to private companies, but only two are functional.
India has committed $90 billion in renewable energy investment so far: UNEP
India committed $90 billion to the renewable energy sector by the end of the first half of this year, making it one of the leading investors in green energy, according to United Nations Environment Programme (UNEP). The report, titled ‘Global Trends in Renewable Energy Investment 2019’ highlights a ranking of countries, including India, based on their renewable energy investments between 2010 and the first half of 2019. China still leads the list committing $758 billion between 2010 and the first half of 2019, with the U.S. second with $356 billion and Japan third with $202 billion.
India’s million dollar solar gift to UN ‘not enough’ to fight climate change
India presented the UN a million dollar gift: Gandhi Solar Park, comprising 193 solar panels each representing a UN member state. The panels have been installed on the rooftop of the UN building in New York. Expected to produce 86,244 kilowatt-hours per year (kWh/year), the panels will cut down the UN’s CO2 emissions, currently equivalent to that released by 30,246 kg of burning coal. The panels can reach a maximum 50 kilowatts of power generation. India’s gift to the UN was received well, but its role in fighting climate change wasn’t. Experts said India produces solar and wind energy, one of the cheapest sources of renewable power, but it continues to permit new coal plants. Greenpeace’s Asish Fernandes said, “It’s time for the government to heed the secretary-general’s call to stop building new coal plants by 2020.”
India sets new guidelines to address disputes between power companies and SECI, NTPC
Centre released new norms to resolve disputes between solar and wind energy companies and government implementing agencies Solar Energy Corporation of India (SECI) or the National Thermal Power Corporation (NTPC). The dispute resolution mechanism (DRM) will be applicable to projects being implemented through SECl or NTPC. The mechanism will provide a secretariat for the dispute resolution committee (DRC), headed by SECI or NTPC officer not below the rank of general manager, who will function as the secretary of the DRC. All appeals against the decisions given by SECI or NTPC will be addressed to the secretary of the DRC. Power developers (companies) will have to first contact SECI or NTPC before submitting the application to the DRC. If they directly approach the committee, their application will get rejected, reported Mercom.
Basic Customs duty proposed to boost domestic solar imports
As domestic solar equipment makers continue to battle cheaper solar imports, ministry of renewable energy has requested the finance ministry to impose a basic Customs duty (BCD) on solar imports from April 2021. The proposed duties range from 10% from the first year up to 30%, in the third year, to boost domestic manufacturing. The ministry wants wafer, EVA, glass, silver, paste, frames, and structures, things used to manufacture modules in India, to be kept out of duty slabs until December 31, 2023. Earlier, a 25% safeguard duty on solar cell imports from China and Malaysia for three years was proposed by Directorate General of Trade Remedies.
Meanwhile, China’s Trina Solar crossed 4,000 Megawatt of solar modules supply in India. The company says India is globally a major solar market.
Google signs new renewable deals, “biggest purchase by a corporate in history”
Google signed 18 new energy deals amounting 1,600-megawatt (MW). Google CEO Sundar Pichai said, “the biggest corporate purchase of green energy in history”, will increase the company’s worldwide portfolio of wind and solar agreements by more than 40%, to 5,500 MW, equivalent to the capacity of a million solar rooftops. This is expected to spur installation of over $2 billion in new energy infrastructure, including millions of solar panels and hundreds of wind turbines spread across three continents.
Amazon orders 100,000 electric delivery vans
Amazon has ordered 100,000 of Rivian’s electric delivery vans — which when delivered will make its fleet the world’s largest electrically-powered suite of vehicles. 10,000 of the vans will enter service by 2021 and the full figure is expected to come online by 2030. Amazon has reportedly invested $440 million into the overhaul and claims it will prevent 4 million tonnes of annual CO2 emissions.
EV tax cuts take effect, country waits for investments to follow
India’s Finance Minister Nirmala Sitharaman’s biggest step so far in addressing the intensifying economic slowdown in the country has been the ₹ 1.45 lakh crore tax cuts for corporates. Among the beneficiaries would be new EV manufacturing companies. Companies set up on or after October 1 will have to pay an effective tax of 17.01% and would be exempt from minimum alternate taxes.
India’s auto sector and its value chain accounts for nearly half of India’s manufacturing GDP. While EVs account for less than 1% of the sales though and most of the components are imported. The new tax incentives complement earlier tax incentives and GST rate cuts that encourage EV purchases. Still, while corporations stand to earn 3-8% more with new tax breaks, it remains to be seen if this translates to increased investments.
EESL to cut EV procurement to less than a third of original plan
The economic slowdown is having a major impact on India’s EV procurement drive. State-run Energy Efficiency Services Ltd (EESL) is seriously considering cutting its sourcing requirements to just 3,000 sedans from the 10,000 that was originally planned until March 2020. With just 1,500 sedans sourced so far, EESL has reportedly decided to limit procurement owing to a lack of demand. EESL’s purported change in plans is another sign of the deepening slowdown in the auto sector, which is already witnessing the worst slump in passenger vehicle sales in almost 20 years.
“India must become coal exporter”, national avg. PLF dropped to 51% in Aug
India’s power secretary SC Garg has said the country should go from importing 20% of its coal requirement to being a “coal exporter”. He lambasted the way coal mines are currently allocated in the country, and has called for large international miners to be brought in to boost India’s coal output from mines allotted to the power sector to be boosted from around 10 million tonnes (MT) a year today to up to 290 MT.
He also warned that nearly ₹ 5 trillion in investments in coal plants were at high risk due to the shortage of coal supplies in India. The average PLF of coal plants in India fell to 51% in August 2019 over impaired coal supplies, but electricity generation nevertheless increased by 3.5% (year-on-year) due to greater hydro power output.
Germany’s RWE aims for “zero carbon” by 2040, pivots to more renewables
RWE, one of Germany’s largest coal miners and coal power producers, has announced it will aim to go “zero carbon” by 2040 as it winds down its coal power output. The group has been in the use for protests against its plan to dig in the Hambach forest, but is now likely to spend up to $1.6billion a year on expanding its solar and wind energy portfolio.
It will also honor Germany’s 2038 target of phasing out coal power, and aims to slash its CO2 emissions by 70% by 2030.
Ships burning crude oil to circumvent IMO sulphur regulations
The shipping industry is experimenting with burning crude oil, that is extracted from the sea bed and has sulphur content that’s as low as <1%, to circumvent the International Marine Organisation (IMO)’s stricter new fuel sulphur standards. Crude oil pumped from various basins does differ in sulphur content, viscosity and flash points (temp. at which the oil burns), and blended mixtures are now being stored up for use in some of the world’s largest cargo liners. The IMO’s new sulphur standards will kick in in 2020.
Natural gas: $33billion in projects across MENA, India to import 5 million tonnes annually from US
Upstream natural gas projects across the Middle East and North Africa (MENA) region have received $33 billion in investments so far, as demand for the relatively cleaner fuel soars across the region at 15% CAGR. The Arab Petroleum Investments Corporation (APICORP) also estimates $1 trillion in new investments across MENA in the next five years. India’s Petronet, meanwhile, has signed a 5 million tonnes of LNG a year-deal with US natural gas producer Tellurian Inc. The gas will be used to fuel LNG buses and trucks and will be supplied through the India’s expanding city gas distribution network. India is betting big on natural gas and plans to scale up the fuel’s consumption by 2.5 times by 2030.